For more information, visit http://www.worldbank.org/prospects December 1, 2017 Taking Stock U.S. Q3 GDP growth was revised up; inflation remained subdued in October. The second reading of U.S. GDP growth in the third quarter came in at a three-year high of 3.3 percent (q/q saar), above the initial estimate of 3.0 percent (Figure 1). The upward revision reflected stronger gains in business investment, exports, and inventories, which offset downward revision in consumer spending growth. Meanwhile, the U.S. personal consumption expenditures (PCE) price index rose 1.6 percent (y/y) in October, after 1.7 percent in September. Excluding food and energy, core PCE inflation remained stable at 1.4 percent (y/y) in October. Euro Area inflation picked up in November; unemployment rate fell. A flash estimate of Euro Area’s consumer price inflation in November came in at 1.5 percent (y/y), up from 1.4 percent in October, mainly reflecting a rise in energy prices (Figure 2). Core inflation, which excludes energy, food, alcohol and tobacco, was 0.9 percent, unchanged from October. Separately, Euro Area unemployment rate fell from 8.9 percent in September (m/m sa) to 8.8 percent in October, the lowest rate since January 2009. Japan core inflation edged up in October; industrial production rebounded. Japan’s core consumer price index (CPI)— which excludes the cost of fresh food—rose 0.8 percent (y/y) in October from 0.7 percent in September. Japan’s industrial production increased 0.5 percent in October, following a contraction in September. Meanwhile, the manufacturing purchasing managers’ index (PMI) rose from 52.8 in October to 53.8 in November, suggesting a pickup in activity. China’s official PMIs increased in November. After declining to 51.6 in October, the manufacturing PMI produced by the National Bureau of Statistics edged up to 51.8 in November. The increase was driven by a pickup in both domestic and external demand. The non-manufacturing PMI rose to 54.8 from 54.3 in October, consistent with strengthening service sector growth. Oil producers agreed to extend oil production cut to 2018. The Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil producers, including Russia, reached agreement to extend output cuts through the end of 2018. Both Brent crude, the global benchmark, and West Texas Intermediate (WTI), the U.S. benchmark, posted their third consecutive monthly gains in November, with WTI rising nearly 18 percent since the May OPEC meeting. Figure 1 U.S. Q3 GDP growth was revised up to 3.3 percent. Figure 2 Euro Are inflation edged up in November. U.S. GDP, annualized quarterly change Euro Area inflation indicators Source: Haver Analytics. Sources: Haver Analytics. Produced by DECPG. Number 369 | December 1, 2017 Major Data Releases (Percent change y-o-y) (Percent change y-o-y) Recent releases: Friday, 24 November - Thursday, 30 November 2017 Upcoming releases: Friday, 1 December - Thursday, 7 December 2017 Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous Mexico 11/24/17 GDP Q3 1.5 % 1.6% 1.9% Romania 12/5/17 GDP Q3 5.9 % France 11/29/17 GDP Q3 2.2 % 2.2 % 1.8 % Hungary 12/5/17 GDP Q3 3.2 % United States 11/29/17 GDP Q3 2.3 % 2.2 % Bulgaria 12/5/17 GDP Q3 3.6 % Poland 11/30/17 GDP Q3 4.9 % 4.7% 3.9 % South Africa 12/5/17 GDP Q3 1.1 % India 11/30/17 GDP Q2 FY 6.3 % 6.5% 5.7 % Eurozone 12/7/17 GDP Q3 2.3 % Brazil 12/1/17 GDP Q3 1.4 % 1.3 % 0.3 % Japan 12/7/17 GDP Q3 2.5 % Activity and Inflation (Percent change y-o-y, except quarterly data on industrial production, which are percent change q-o-q, annualized) 2016 2017 2016 2017 2015 2016 Q4 Q1 Q2 Q3 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 1 Industrial Production, sa World 1.6 1.7 4.7 3.7 4.7 3.1 2.9 3.3 2.7 3.0 3.8 3.5 4.1 3.8 4.0 4.0 4.1 - Advanced Economies 0.2 0.2 4.0 1.5 4.4 2.4 2.0 2.6 1.1 2.2 2.4 2.5 3.2 3.0 3.0 3.2 3.0 - Emerging Market and Developing Economies 3.2 3.4 5.4 6.0 4.9 3.9 3.8 4.1 4.4 3.7 5.3 4.5 5.1 4.7 5.1 4.9 5.3 - Commodity-exporting EMDE -1.8 -2.0 -1.0 3.2 1.6 3.3 -1.3 0.2 -0.2 -1.4 0.5 -0.1 2.1 -0.2 1.1 2.0 2.1 - Other EMDE 5.1 5.1 7.4 6.8 5.9 4.0 5.4 5.3 5.8 5.3 6.7 5.9 6.0 6.2 6.2 5.7 6.1 5.7 East Asia and Pacific 5.8 5.9 6.2 7.2 6.5 4.6 5.9 6.0 6.2 6.1 7.4 6.3 6.4 6.6 6.0 5.9 6.5 6.1 East Asia excl. China 3.6 4.6 3.3 5.0 2.5 8.3 4.4 6.2 4.6 5.1 6.0 4.8 5.6 0.9 3.6 4.8 5.8 - Europe and Central Asia 1.5 2.0 9.3 5.4 8.0 2.5 2.7 2.7 4.3 1.4 4.3 4.4 6.4 4.9 6.7 6.0 6.1 5.4 Latin America and Caribbean -3.5 -5.4 -3.0 1.7 -4.6 2.0 -4.1 -1.9 -3.3 -3.7 -2.3 -4.3 -1.9 -1.9 -1.3 -0.7 -1.1 - Middle East and North Africa -3.3 -7.0 25.0 20.0 21.1 11.4 -4.7 10.3 13.1 17.1 4.7 21.0 20.3 23.1 30.8 15.3 12.4 - South Asia 3.5 5.2 6.7 4.9 2.1 2.9 5.1 2.8 4.2 1.9 5.4 4.6 4.0 0.1 3.5 4.1 4.9 - Sub-Saharan Africa -0.3 0.9 -2.5 -4.4 2.9 4.2 1.1 -0.9 0.1 -2.5 -2.1 -0.5 -1.9 -2.7 -0.5 1.1 -0.6 - Inflation, sa 2 World 1.4 1.5 1.7 2.4 2.1 2.2 1.7 2.0 2.3 2.5 2.6 2.3 2.1 1.9 2.1 2.2 2.2 2.3 Advanced Economies 0.1 0.3 0.8 1.6 1.4 1.5 0.7 1.1 1.5 1.8 1.6 1.9 1.5 1.2 1.4 1.5 1.5 1.5 Emerging Market and Developing Economies 2.4 2.7 2.7 3.4 3.3 3.1 2.6 2.7 3.1 3.4 3.5 3.5 3.4 3.0 2.9 3.3 3.4 3.5 Commodity-exporting EMDE 3.7 3.5 3.3 3.5 3.5 3.5 3.4 3.3 3.4 3.5 3.6 3.7 3.6 3.5 3.4 3.5 3.6 3.6 Other EMDE 1.0 1.1 1.7 3.1 3.1 3.0 1.6 1.8 2.6 3.3 3.5 3.2 3.1 2.5 2.5 2.9 3.4 3.4 East Asia and Pacific 1.2 2.0 2.5 2.7 2.9 2.7 2.4 2.6 2.7 3.2 3.4 3.2 3.1 2.5 2.5 3.0 3.4 3.2 Europe and Central Asia 1.9 0.4 1.0 2.4 2.3 2.7 0.9 1.6 2.3 2.5 2.7 2.6 2.3 2.2 2.4 2.6 2.8 2.6 Latin America and Caribbean 2.7 2.4 2.8 3.4 3.1 3.2 2.8 2.7 3.3 3.4 3.3 3.6 3.1 2.8 2.8 3.2 3.6 3.8 Middle East and North Africa 1.8 2.7 2.0 2.5 1.8 1.4 2.0 1.8 2.2 2.5 2.9 2.0 2.0 1.5 1.3 1.5 1.7 2.1 South Asia 4.5 4.4 4.7 4.3 4.5 3.4 4.6 3.8 3.7 4.2 4.9 4.8 5.0 3.9 2.9 3.4 3.9 3.8 Sub-Saharan Africa 3.6 5.2 5.7 6.5 6.5 5.5 5.9 5.7 6.7 6.7 6.5 6.7 6.5 6.4 5.5 5.3 5.5 5.0 1 Industrial production is total production (may exclude construction). When data are unavailable, "industral production, manufacturing" is used as a proxy. 2 Median inflation rate for each grouping. Trade and Finance (Percent change y-o-y, except quarterly trade data, which are percent change q-o-q, annualized, and international reserves data, which are percent change over the previous period) 2016 2017 2016 2017 2015 2016 Q4 Q1 Q2 Q3 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Exports, Nominal, US$, sa World -11.6 -3.0 8.8 19.5 3.0 12.2 5.1 4.0 11.0 7.7 12.9 3.9 11.2 7.7 10.2 10.7 11.2 - Advanced Economies -11.4 -0.8 5.4 19.4 1.4 17.3 6.2 5.6 10.1 8.1 10.7 1.2 10.3 6.6 9.9 10.5 11.3 - Emerging Market and Developing Economies -11.9 -6.5 15.3 19.7 5.8 3.3 3.4 1.6 12.6 6.9 17.0 8.8 12.8 9.6 10.6 11.0 10.9 - Commodity-exporting EMDE -24.2 -9.2 29.0 39.9 -12.3 13.2 8.8 7.7 26.6 19.1 23.2 13.3 19.4 9.7 16.2 16.1 14.9 - Other EMDE -3.7 -4.6 10.4 12.3 14.2 0.1 1.8 -0.4 7.5 2.2 14.7 7.1 10.3 9.5 8.6 9.1 9.6 9.8 East Asia and Pacific -3.5 -6.1 11.1 13.1 16.1 -1.6 1.8 -2.1 8.8 2.2 15.6 8.9 11.3 9.3 10.4 8.1 9.8 9.8 Europe and Central Asia -20.7 -6.1 19.8 35.0 -4.3 16.9 6.5 7.6 22.4 12.4 20.8 5.6 19.3 10.9 11.2 19.8 16.8 - Latin America and Caribbean -11.8 -2.4 14.0 28.8 -3.0 5.7 10.0 10.8 14.8 12.3 17.4 9.7 11.6 12.5 10.6 11.4 10.4 16.6 Middle East and North Africa -27.1 - - - - - - - - - - - - - - - - - South Asia -4.0 0.7 31.8 10.7 -8.7 20.8 1.5 2.2 3.1 0.0 11.2 6.6 -1.6 -3.1 12.2 10.4 15.3 - Sub-Saharan Africa -26.9 -14.7 29.3 46.0 -14.9 - 1.0 3.5 22.6 25.8 19.8 8.7 14.0 13.0 - - - - Imports, Nominal, US$, sa World -6.9 -5.2 23.9 21.7 16.1 -2.9 3.6 -1.6 11.5 5.4 10.3 -6.2 25.4 7.2 21.2 16.1 5.6 - Advanced Economies -12.7 -3.2 2.6 21.0 2.5 13.7 2.7 1.5 9.6 3.4 9.2 1.9 10.3 5.0 10.7 9.4 9.1 - Emerging Market and Developing Economies -3.3 -6.3 38.8 22.1 24.6 -11.2 4.1 -3.3 12.6 6.6 11.0 -10.4 34.6 8.5 27.7 20.4 3.5 - Commodity-exporting EMDE -1.0 -7.1 44.6 17.4 34.2 -16.3 3.8 -5.5 11.9 2.1 8.8 -15.4 39.7 7.3 31.5 22.4 -0.6 - Other EMDE -11.4 -3.1 21.4 39.2 -2.9 8.6 5.4 4.3 14.9 22.8 18.8 11.1 17.5 12.6 15.4 14.1 17.2 15.7 East Asia and Pacific -13.1 -3.6 22.9 49.3 -11.0 11.1 6.0 5.7 17.0 33.7 20.5 12.5 17.9 13.5 15.7 13.9 18.7 17.7 Europe and Central Asia -20.8 -1.2 11.0 43.4 12.8 16.4 5.9 8.4 20.9 10.0 14.4 7.7 22.9 13.6 26.4 16.6 18.3 - Latin America and Caribbean -9.9 -7.4 4.9 26.1 -9.0 9.2 1.4 3.6 11.0 5.1 13.3 -1.3 12.3 6.1 7.2 9.1 4.8 15.6 Middle East and North Africa 1.4 - - - - - - - - - - - - - - - - - South Asia -13.2 -5.4 58.0 33.2 13.0 -16.3 12.0 2.8 14.8 21.6 40.5 42.1 31.1 13.6 19.1 19.7 17.6 9.4 Sub-Saharan Africa -7.7 -13.9 -8.9 - - - -9.2 -12.2 - - - - - - - - - - International Reserves, US$ 1 World -5.9 -1.8 -2.7 1.9 2.2 1.7 -1.4 -0.5 0.8 0.3 0.7 0.8 0.9 0.5 0.9 0.6 0.4 - Advanced Economies 2.1 3.4 -1.1 3.7 3.0 1.4 -0.8 0.0 1.6 0.4 1.6 1.3 1.2 0.5 0.9 0.5 0.2 - Emerging Market and Developing Economies -10.0 -4.9 -3.7 0.7 1.6 1.9 -1.8 -0.9 0.2 0.3 0.1 0.4 0.7 0.5 0.8 0.7 0.5 - Commodity-exporting EMDE - - - - - - - - - - - - - - - - - - Other EMDE -10.4 -6.1 -4.4 0.6 2.0 2.2 -2.1 -1.2 0.1 0.3 0.2 0.6 0.9 0.5 0.9 0.7 0.5 -0.1 East Asia and Pacific -12.5 -7.7 -4.7 0.4 1.6 2.1 -2.3 -1.2 -0.1 0.4 0.1 0.8 0.8 0.1 0.9 0.6 0.6 0.0 Europe and Central Asia -5.8 3.6 -4.4 2.9 3.1 2.9 -1.8 -1.7 1.9 0.7 0.3 -0.1 1.3 1.9 1.0 1.6 0.3 -0.6 Latin America and Caribbean -5.6 3.0 0.5 2.5 0.9 1.7 -0.5 0.4 1.6 0.9 0.0 0.5 -0.2 0.6 0.6 0.7 0.4 0.1 Middle East and North Africa - - - - - - - - - - - - - - - - - - South Asia 10.7 3.6 -3.1 2.1 4.8 3.1 -1.6 -0.3 0.6 0.5 1.0 0.8 2.0 1.9 1.5 1.3 0.3 -0.2 Sub-Saharan Africa - - - - - - - - - - - - - - - - - - 1 Total reserves excluding gold are used as proxies when total reserves data are unavailable. Produced by DECPG. Number 369 | December 1, 2017 Financial Markets 1 2016 2017 2016 2017 MRV 2015 2016 Q4 Q1 Q2 Q3 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Interest rates and LIBOR (percent) U.S. Fed Funds Effective 0.13 0.40 0.45 0.70 0.95 1.15 0.41 0.55 0.66 0.66 0.79 0.91 0.90 1.04 1.15 1.15 1.16 1.16 1.16 ECB repo 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 US$ LIBOR 3-months 0.32 0.74 0.92 1.07 1.20 1.32 0.91 0.98 1.03 1.04 1.13 1.16 1.19 1.26 1.31 1.31 1.32 1.36 1.48 EURIBOR 3-months -0.02 -0.26 -0.31 -0.33 -0.33 -0.33 -0.31 -0.32 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 US 10-yr Treasury yield 2.12 1.84 2.12 2.44 2.25 2.24 2.12 2.50 2.44 2.42 2.47 2.29 2.29 2.18 2.32 2.21 2.19 2.35 2.34 German Bund, 10 yr 0.54 0.14 0.18 0.35 0.30 0.46 0.22 0.30 0.34 0.32 0.39 0.25 0.36 0.28 0.55 0.42 0.41 0.42 0.38 Spreads (basis points) JP Morgan Emerging Markets 415 410 369 340 325 322 380 370 354 338 329 331 320 325 327 325 314 306 315 Asia 224 221 197 175 169 161 201 198 185 173 166 173 167 166 163 163 157 148 151 Europe 348 302 283 261 242 234 294 282 272 258 253 250 237 240 243 234 224 226 239 Latin America & Caribbean 540 537 475 445 427 428 491 481 463 442 431 431 420 430 435 435 416 407 417 Middle East 456 517 467 396 362 383 475 438 416 396 377 350 353 382 382 382 384 381 411 Africa 415 518 436 389 386 380 444 422 401 387 380 400 376 383 394 378 367 360 347 Stock Indices (end of period) Global (MSCI) 399 424 424 449 465 487 413 424 433 445 449 455 464 465 478 478 487 497 504 Advanced Economies ($ Index) 1663 1761 1761 1854 1916 2001 1712 1761 1792 1839 1854 1878 1912 1916 1961 1960 2001 2037 2066 United States (S&P 500) 2044 2258 2258 2363 2423 2519 2199 2258 2279 2364 2363 2384 2421 2423 2470 2472 2519 2575 2626 Europe (S&P Euro 350) 1474 1475 1475 1547 1534 1571 1388 1475 1463 1501 1547 1564 1576 1534 1526 1512 1571 1600 1570 Japan (Nikkei 225) 18817 19302 19302 18909 20033 20356 18604 19302 19035 19342 18909 19197 19836 20033 19974 19720 20356 22198 22629 Emerging Market and Developing Economies (MSCI) 794 861 861 958 1011 1082 863 861 909 936 958 978 1005 1011 1066 1088 1082 1119 1141 EM Asia 404 419 419 474 512 543 426 419 443 459 474 484 505 512 538 544 543 571 584 EM Europe 244 295 295 301 304 331 273 295 302 296 301 313 308 304 315 336 331 330 330 EM Europe & Middle East 211 248 248 252 251 268 230 248 253 249 252 259 255 251 261 274 268 268 266 EM Latin America & Caribbean 1830 2341 2341 2611 2544 2917 2330 2341 2516 2600 2611 2601 2532 2544 2752 2873 2917 2809 2781 Exchange Rates (LCU / USD) Advanced Economies Euro Area 0.90 0.90 0.93 0.94 0.91 0.85 0.93 0.95 0.94 0.94 0.94 0.93 0.91 0.89 0.87 0.85 0.84 0.85 0.84 Japan 121.00 108.80 109.63 113.63 111.10 110.96 108.90 116.28 115.03 112.96 112.91 110.02 112.36 110.91 112.31 109.78 110.80 112.93 111.21 Emerging and Developing Economies Brazil 3.33 3.49 3.28 3.14 3.21 3.16 3.33 3.35 3.20 3.10 3.13 3.14 3.20 3.30 3.20 3.15 3.13 3.19 3.21 China 6.29 6.65 6.84 6.89 6.86 6.67 6.85 6.92 6.89 6.87 6.90 6.89 6.88 6.81 6.77 6.67 6.57 6.62 6.61 Egypt 7.70 10.12 14.71 17.82 18.10 17.77 16.34 18.56 18.68 17.01 17.76 18.09 18.10 18.11 17.92 17.75 17.65 17.64 17.77 India 64.14 67.19 67.39 66.97 64.48 64.29 67.60 67.86 68.06 67.01 65.83 64.52 64.46 64.45 64.44 63.97 64.46 65.07 64.41 Russia 61.34 67.06 62.95 58.67 57.17 58.93 64.25 62.03 59.76 58.42 57.83 56.53 56.88 58.10 59.72 59.42 57.66 57.76 58.38 South Africa 12.77 14.71 13.92 13.24 13.21 13.19 13.96 13.88 13.60 13.17 12.95 13.46 13.25 12.91 13.15 13.25 13.17 13.71 13.66 Memo: U.S. nominal effective rate (index) 114.7 119.7 122.5 123.4 120.7 116.6 122.9 124.9 124.8 123.0 122.5 121.6 121.0 119.4 117.9 116.4 115.4 117.4 116.6 1 MRV = Most Recent Value. Commodity Prices 2016 2017 2016 2017 MRV 1 2015 2016 Q4 Q1 Q2 Q3 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Energy 2 65 55 64 68 64 65 59 68 69 69 65 67 64 60 62 65 69 71 71 Non-energy 2 82 80 83 86 82 84 83 84 85 87 85 83 83 82 83 84 86 86 86 2 Agriculture 89 89 90 91 88 87 90 89 91 91 89 88 89 87 88 86 88 87 87 2 Metals and minerals 68 64 71 78 74 81 73 75 76 79 79 75 73 72 76 83 84 84 84 Memo items: Crude oil, average ($/bbl) 51 43 49 53 50 50 45 53 54 54 51 52 50 46 48 50 53 55 61 Gold ($/toz) 1161 1249 1221 1219 1258 1278 1238 1157 1192 1234 1231 1267 1246 1260 1237 1283 1314 1280 1280 Baltic Dry Index 711 676 994 938 1023 1138 1080 1031 913 760 1142 1229 979 861 906 1144 1363 1484 1477 Source: World Bank, World Bank Commodities Price Data (The Pink Sheet), Bloomberg 1 MRV = Most Recent Value. 2 Indexes, 2010 = 100. Produced by DECPG. Number 369 | December 1, 2017